Bush's budget likely will double deficit

WASHINGTON -- The budget that President Bush unveils Monday is likely to feature deficits reaching $400 billion this year and next, leaving his successor a fiscal ledger dripping with red ink.

WASHINGTON -- The budget that President Bush unveils Monday is likely to feature deficits reaching $400 billion this year and next, leaving his successor a fiscal ledger dripping with red ink.

The slowing economy is generating less tax revenue. That, combined with continuing war costs and the deficit-financed economic-stimulus bill, will more than double the 2008 deficit from the $163 billion registered in 2007.

White House budget officials acknowledge that back-of-the-envelope calculations based on recent Congressional Budget Office data point to deficits in the $400 billion range this year and next. They acknowledge that the CBO figures are a good indicator as to where their projections will be next week.

The CBO sees a deficit of about $250 billion this year once the cost of the war in Iraq is factored in. The economic-stimulus bill passed by the House on Tuesday would add another $146 billion. Then add more interest costs, extension of expiring tax breaks and likely supplemental appropriations for disaster aid, avian flu and other perennials, and the $400 billion mark is easily breached.

What is more, White House revenue estimates are likely to be more pessimistic than the CBO's, which were produced before the release of a recent spate of worsening economic data, including the weak 0.6 percent figure for fourth-quarter gross domestic product released by the Commerce Department yesterday.

"A $400 billion number could easily be an honest number if you throw in the stimulus package and the full cost of the war," said Sen. Judd Gregg of New Hampshire, the Budget Committee's top Republican. "Revenues are just really going to take a dive."

Such deficits would certainly create a challenge for Bush's successor, regardless of political party. A $400 billion deficit would approach the record $413 billion tallied in 2004.

"It would probably put heavy pressure on the next president to focus on the deficit," said G. William Hoagland, a longtime former Capitol Hill budget aide who is vice president for public policy for CIGNA. "It will at least become a political tool for this fall."

Bush has promised a plan that would erase the deficit by 2012 if his policies are followed.

But he would have to propose cuts to Medicare and Medicaid, virtually freeze domestic programs, and leave out war costs and the cost of revising the alternative minimum tax, so it does not affect more middle-class taxpayers.